CFAS Prelims: Important Questions and Concepts
Accounting Standards Council - correct answer ✔✔The accounting function is to provide quantitative
information, primarily financial in nature, about economic entities that is intended to be useful in making
economic decisions
American Accounting Association - correct answer ✔✔Accounting is the process of identifying,
measuring, communicating economic information to permit informed judgement and decisions by users
of the information.
identifying - correct answer ✔✔analytical component
Measuring - correct answer ✔✔technical component
Communicating - correct answer ✔✔formal component
Identifying - correct answer ✔✔recognition or nonrecognition of business activities as accountable event
accountable or quantifiable - correct answer ✔✔an event is ___________ when it has an effect on
assets, liab, equity
economic activity - correct answer ✔✔it is the subject matter of accounting
Sociological and psychological matters - correct answer ✔✔they are beyond the province of accounting
transactions - correct answer ✔✔it may be classified as external and internal; it is the economic
activities of an entity
external transactions - correct answer ✔✔also called as exchange transactions
External Transactions - correct answer ✔✔involves one entity and another entity
, internal transactions - correct answer ✔✔involving the entity only
Production - correct answer ✔✔process by which resources are transformed into products
Casualty - correct answer ✔✔a sudden and unanticipated loss from fire, flood, earthquake and other
event ordinarily termed as an act of God
Measuring - correct answer ✔✔Assigning of peso amounts to the accountable economic transactions
and events
Philippine Peso - correct answer ✔✔unit of measuring accountable economic transactions
Historical Cost - correct answer ✔✔most common measure of financial transactions
historical cost, current cost, realizable value, present value - correct answer ✔✔Measurement bases
Communicating - correct answer ✔✔process of preparing and distributing accounting reports to
potential users
Communicating process - correct answer ✔✔reason why accountung has been called "the universal
language of business"
recording, classifying, summarizing - correct answer ✔✔implicit in the communication process
Recording or journalizing - correct answer ✔✔process of systematically maintaining a record of all
economic transactions after have been identified and measured
Classifying - correct answer ✔✔sorting or grouping of similar and interrelated economic transaction into
their respective classes
Accounting Standards Council - correct answer ✔✔The accounting function is to provide quantitative
information, primarily financial in nature, about economic entities that is intended to be useful in making
economic decisions
American Accounting Association - correct answer ✔✔Accounting is the process of identifying,
measuring, communicating economic information to permit informed judgement and decisions by users
of the information.
identifying - correct answer ✔✔analytical component
Measuring - correct answer ✔✔technical component
Communicating - correct answer ✔✔formal component
Identifying - correct answer ✔✔recognition or nonrecognition of business activities as accountable event
accountable or quantifiable - correct answer ✔✔an event is ___________ when it has an effect on
assets, liab, equity
economic activity - correct answer ✔✔it is the subject matter of accounting
Sociological and psychological matters - correct answer ✔✔they are beyond the province of accounting
transactions - correct answer ✔✔it may be classified as external and internal; it is the economic
activities of an entity
external transactions - correct answer ✔✔also called as exchange transactions
External Transactions - correct answer ✔✔involves one entity and another entity
, internal transactions - correct answer ✔✔involving the entity only
Production - correct answer ✔✔process by which resources are transformed into products
Casualty - correct answer ✔✔a sudden and unanticipated loss from fire, flood, earthquake and other
event ordinarily termed as an act of God
Measuring - correct answer ✔✔Assigning of peso amounts to the accountable economic transactions
and events
Philippine Peso - correct answer ✔✔unit of measuring accountable economic transactions
Historical Cost - correct answer ✔✔most common measure of financial transactions
historical cost, current cost, realizable value, present value - correct answer ✔✔Measurement bases
Communicating - correct answer ✔✔process of preparing and distributing accounting reports to
potential users
Communicating process - correct answer ✔✔reason why accountung has been called "the universal
language of business"
recording, classifying, summarizing - correct answer ✔✔implicit in the communication process
Recording or journalizing - correct answer ✔✔process of systematically maintaining a record of all
economic transactions after have been identified and measured
Classifying - correct answer ✔✔sorting or grouping of similar and interrelated economic transaction into
their respective classes
